Researcher ORCID Identifier

Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Eric Hughson

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© 2020 Rishi R Deva

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Environmental, Social, and Governance (ESG) has seen a growing importance in the global economy with firms constantly evaluating ways to comply with rising standards of sustainability. Previous empirical work on ESG performance in the U.S. corporate debt market raises the question of how an intangible factor such as ESG is valued in the bond market, particularly in terms of the cost firms incur when issuing bonds. Using firm-specific and bond-specific data from a sample of 698 bond issuances in the United States between the 2015-2019 period, this paper finds a negative association between firm ESG performance and the cost of issuing corporate bonds. It also establishes this relationship to be linear across all levels of ESG performance, and significant only for investment grade bond issuers. As firms faring poorly in ESG are associated with paying higher risk premiums for corporate bonds, the findings suggest that stakeholders perceive firms with better ESG performance to be more creditworthy.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.